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Digital Asset Investment Products Experience $16 Million Outflows, Breaking 11-Week Inflow Streak

Source: Adobe / Andy Nowack

Digital asset investment products witnessed outflows of $16 million last week, putting an end to an 11-week streak of consecutive inflows.

According to the latest report by CoinShares, Bitcoin-based funds bore the brunt of the outflows, with a total of $32.8 million exiting the market. 

Additionally, short Bitcoin (BTC) investment products also suffered outflows, reaching $0.3 million. 

Despite the outflows, trading activity remained higher than the yearly average, with a total volume of $3.6 billion recorded last week, compared to the $1.6 billion average.

This reversal in investor sentiment coincided with a decline in the price of Bitcoin, which dropped approximately 5% during the week, thus ending an eight-week streak of consecutive gains. 

At the time of writing, Bitcoin is currently trading at $40,800.

Leading asset managers including CoinShares, Bitwise, Grayscale, ProShares, and 21Shares all experienced net outflows during this period, marking a significant departure from the previous trend. 

CoinShares’ Head of Research James Butterfill said the outflows appear to be driven more by profit-taking rather than a fundamental shift in sentiment towards the asset class. 

Analysis of regional flows reveals that the majority of net outflows originated from the U.S. and German markets, amounting to $18.3 million and $9.7 million respectively. 

Conversely, Switzerland experienced inflows of $9.1 million, while Canada recorded $6.9 million in inflows.

These mixed regional flows suggest that investors are capitalizing on recent gains, opting to secure profits rather than expressing a lack of confidence in digital assets as a whole. 

Analyst Expects Bitcoin to Reach $1 Million

Despite the recent market downturn, Samson Mow, CEO of Jan3, believes Bitcoin has the potential to skyrocket to $1 million within a matter of days to weeks following the approval of a spot exchange-traded fund (ETF).

“You’re hitting a very limited supply of Bitcoin on the exchanges and available for purchase with a torrent of money,” he said. 

“This is why you can go really high all at one time.”

Mow highlighted the inflow of institutional capital that is expected to accompany the approval of a spot ETF, stating that there will be a torrent of money seeking to purchase the limited available Bitcoin on exchanges.

The surge in demand, coupled with the scarcity of supply, could result in a rapid and substantial price increase.

Comparing this expected rally to predictions made by entrepreneur Balaji Srinivasan, Mow asserts that the impact of a spot Bitcoin ETF approval on prices will unfold much faster than the effects of central bank money printing. 

While money printing slowly permeates the economy over the years, the approval of a spot ETF could cause a sudden and explosive surge in Bitcoin’s value.

Mow anticipates that the rally to $1 million will occur at an unprecedented pace compared to previous Bitcoin bull runs. 

The 2017 rally, for instance, took nine months to achieve a 20-fold increase in value. 

However, with the influx of billions of dollars through ETF approvals, Mow expects the timeframe for reaching $1 million to be significantly shorter.


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